3B CORPO Digests

NEMESIO GARCIA v. NICOLAS JOMOUAD, RTC Ruling

Ex-Officio Provincial Sheriff of Cebu, and SPOUSES Dismissed petitioner's complaint for lack of merit.
JOSE ATINON & SALLY ATINON
January 26, 2000 CA Ruling
Affirmed.
G.R. No. 133969 KAPUNAN, J

Related Article: Tickler: Unrecorded transfer Petitioner’s claim:

Section 63 (Now of POC No. 0668 in Cebu a. Dico, the judgment debtor of Spouses Atinon, was
Sec 62) - Transfer Country Club; injunction case employed as manager of his Young Auto Supply.
of Shares in relation to a collection case b. To assist him in entertaining clients, petitioner "lent"
his POC in the Cebu Country Club to Dico so he
could enjoy its "signing" privileges.
Doctrine of the Case
c. The Club issued POC No. 0668 in the name of
Sec. 63 Certificate of stock and transfer of shares. No
Dico.
transfer, however, shall be valid, except as between the
d. Dico resigned as manager of petitioner's business.
parties, until the transfer is recorded in the books of the
e. Dico returned POC No. 0668.
corporation showing the names of the parties to the
f. Dico executed a Deed of Transfer in favor of
transaction, the date of the transfer, the number of the
petitioner.
certificate or certificates and the number of shares
g. The Club was furnished with a copy but the transfer
transferred.
was not recorded in its books.

Parties – Roles
Hence, the subject stock certificate, albeit in the name
● Petitioner Garcia – Petitioner in the present action
of Dico, cannot be levied upon on execution to satisfy
for injunction who claims to be the real owner of the
his judgment debt because even prior to the institution
subject certificate
of the collection case:
● Spouses Atinon – Petitioners in the collection
1. Spouses Atinon had knowledge that Dico already
case against Dico; judgment creditors of Dico
conveyed back the ownership of the certificate;
● Dico – defendant in the collection case; judgment
2. Dico executed a deed of transfer and the Club was
debtor of Spouses
furnished with a copy; and
● Jomouad – ex-officio sheriff of Cebu who
3. Dico resigned as a proprietary member of the Club
proceeded with execution of judgment in the
which was accepted by the BOD at their meeting.
collection case
Issue/s
Facts
Whether a transfer of the shares of a corporation, not
Petitioner Garcia filed an action for injunction with
registered in the books of the corporation, is valid (NO)
prayer for preliminary injunction against respondents
spouses Atinon and Jomouad, ex-officio sheriff of Cebu.
Ruling
SECTION 63, Old Corp Code (Sec 62, RCC).
The action stemmed from an earlier case for collection
Certificate of stock and transfer of shares. — xxx No
of sum of money filed by the spouses Atinon against
transfer, however, shall be valid, except as between the
Dico, where the RTC rendered judgment ordering Dico
parties, until the transfer is recorded in the books of the
to pay the spouses Atinon P900,000 + interests.
corporation showing the names of the parties to the
transaction, the date of the transfer, the number of the
After said judgment became final and executory,
certificate or certificates and the number of shares
respondent sheriff proceeded with its execution.
transferred. xxx

The Proprietary Ownership Certificate (POC) No. 0668

Uson vs. Diosomito: The attachment prevails over the
in Cebu Country Club, which was in the name of Dico,
unrecorded transfer — all transfers of shares not so
was levied on and scheduled for public auction.
entered are invalid as to attaching or execution creditors
of the assignors, corporation, to subsequent purchasers
Claiming ownership over the subject certificate,
in good faith, and to all persons interested, except the
petitioner filed the action for injunction with prayer for
parties to such transfers. …not because they are
preliminary injunction to enjoin respondents from
without notice or fraudulent in law or fact, but because
proceeding with the auction.
they are made so void by statute.

Izel Tan
 3B CORPO Digests

In this case, the transfer of the certificate was not valid

as to the spouses Atinon, as it still stood in the name of
Dico, at the time of the levy on execution.

In addition, the entry in the minutes of the meeting of the

Club's BOD noting the resignation of Dico as proprietary
member does not constitute compliance with Sec 63
(Now Sec 62), which strictly requires the recording of
the transfer in the books of the corporation, and not
elsewhere, to be valid as against third parties.

Disposition:
IN VIEW OF THE FOREGOING, the Court RESOLVED
to DENY the petition.

Izel Tan